LAKE BLUFF, Ill. - Too few credit unions get the in-depth information that they need before they make major decisions about their card portfolios, such as whether or not they should keep or sell them, without really fine tuning their program to get a good understanding of how it could really perform, said a leading card consultant. "The card portfolio is a highly significant asset," observed Ondine Irving, a former card executive and consultant who has branched out to start her own firm. "And it bothers me that sometimes credit unions don't really take the time to make some really very simple changes to their portfolio management that could really make a difference." Irving has worked with credit union card programs for over 20 years, including as an employee with the $1 billion Baxter Credit Union and as an analyst for Raddon Financial Group and consultant Certegy. Irving says that credit unions occasionally miss these "fine tuning" sorts of issues because they have limited staff working on the card portfolio and that sometimes the card program staff turns over rapidly. In addition, sometimes credit unions might focus their attention on making a big change to their existing portfolio, such as by adding a Platinum Visa card program, and lose sight of the smaller changes which are harder to notice but which make a big difference. She particularly faults brokers for too often focusing on the negatives of a card program but without offering advice on how to make a portfolio run more profitably. "Many brokers do an excellent job of focusing on the negative aspects of the card program: stagnant growth, bankruptcies, delinquencies and charge off expenses," she said, "along with the perceived inability to compete with the big issuers. That's just nonsense," she said. Irving explained that there are seven basic areas which many credit unions overlook when evaluating their card programs and which they should include in any regular program checks. And many require an inclination to look deeper into the details of a given area rather than merely skimming the surface. When it comes to inactive accounts for example, Irving explained, most credit unions know that they need to address the problem. But sometimes CUs don't realize that the "inactive accounts" line from a card processors' report might mask some of the different types of inactive accounts, such as accounts to which cards had been issued but never activated versus accounts that merely hadn't been used in a while. Getting the card database cleared of the truly inactive accounts versus those which are in different categories can save a credit union a good deal of money and can help it see what sorts of promotion their card program really needs. She described one of her former clients, a $1 billion CU then and which had a 65,000 card portfolio, 50% of which was considered inactive. But the inactive designation masked non-activated accounts, blocked accounts and permanently closed accounts, Irving explained. "Cleaning up the database and ridding the portfolio of stale accounts, reduced processing expenses, allowed the credit union to gain a better perspective of where they were and what needed to be done in terms of program design and marketing," she added. She also tells the story of another of her clients, a $37 million credit union which had just under 14,000 card accounts. About 24% of the CU's card base was considered inactive and the CU saved itself $6,000 annually by moving these "dead" accounts off the system. "In situations where a CU is working with a processor for its card transactions, it makes sense to go through the card base with an eye for accounts that are costing money but maybe not bringing any in," Irving said. Looking at how it structures its card program, considering whether it has someone in the CU that takes ownership of the program and evaluating whether it uses risk based pricing are all things that a CU can do to build better card performance, Irving explained, highlighting that sometimes these things can be very simple. In one of her cases, a $375 million credit union with 8,000 credit card accounts had told its members that it would assess late fees when payments were five days late, but in reality the system parameter assessed the fee when the payments were 15 days late. Moving that parameter to five days from 15, the credit union was able to increase its fee income by $80,000 annually. Another $1 billion CU client achieved similar results when it began to assess over limit fees on the day of the occurrence and not waiting for the cycle date. The 52,000 card accounts now generat $20,000 per month in additional fee income, Irving said. -dmorrison@cutimes.com